And Perth-based internet service provider iinet has confirmed its intention of buying Canberra-based TransACT for $60 million.

The purchase was foreshadowed late last week when iinet shares went into a trading halt at $2.36 each.

Yesterday the market gave the deal the thumbs up and lifted iinet shares by 19c to $2.52, a rise of 8% on a day when the wider market drifted and finished slightly lower.

The company told the ASX yesterday it had entered into a binding agreement to purchase TransACT, and described the acquisition as "consistent with building scale through consolidation".

Chief executive of iinet, Michael Malone, said in the statement the deal would cement the company's position as "the new number two provider" of DSL broadband.

TransACT had about 40,000 customers throughout the ACT, Queanbeyan and regional Victoria, iinet said, across the residential, business and government sectors.

"iiNet's acquisition of TransACT represents an attractive strategic opportunity to build scale in the ACT market quickly and efficiently," Mr Malone said in the statement.

"In addition, TransACT will also provide iiNet with the opportunity to deliver super-fast broadband services in the region, similar to our recently launched NBN plans."

iinet said TransACT had "total recurring annual revenue" of about $80 million and earnings before interest, tax, depreciation and amortisation of $17 million.

The company said the purchase would be funded through cash and existing debt facilities and is expected to be completed by November 30.

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